Spanish government to sell abandoned nuclear plant sites

Thursday, May 19, 2005

The Spanish government plans to open tenders for purchase of land at three sites for nuclear power plants that never operated, a spokesman at the Ministry of Industry, Trade & Tourism said May 9. The plants fell victim to the country's 1984 nuclear construction moratorium.

The government's plans are cited in draft legislation called the "Reform to Promote Productivity Law," which envisages a "tender or auction" for land housing the abandoned stations of Lemoniz, near Bilbao; Valdecaballeros in southern Badajoz province; and Trillo-2 in Guadalajara east of Madrid.

Under current proposals, utilities Iberdrola and Endesa, which were the original owners of the nuclear sites, would be permitted to match the best offers made to the government for the land. A Ministry of Industry, Trade & Tourism spokesman said May 13 that the Spanish government became the owner of the sites' land once the utilities had agreed to a compensation program following the adoption of the moratorium.

Spanish business newspaper Expansion said May 9 that both companies were now interested in building combined-cycle plants at the sites.

Under the imposed moratorium, the electricity companies were allowed to recover 5-billion euros ($6.4-billion currently) in sunk costs in the three stations through a 3% surcharge on domestic electricity bills. The government took over the sites and all equipment installed there, which ranged from a complete PWR plant at Lemoniz to what industry officials called a "hole in the ground" at Trillo-2. The government has since sold all the equipment that was usable, an industry source said.

The source said the sites are potentially attractive for power plant construction because they have infrastructure and are close to the national grid. Valdecaballeros has a big switchyard, for example. But in reality, the source said, "the most interesting site is Trillo," which already hosts a 1,066-MW PWR and corresponding infrastructure.

The government is expected to pay off outstanding compensation owed to utilities using the proceeds from the site sale, which would reduce the surcharge on electricity rates.

"The government expects to adopt the bill by the end of the year, but the actual sale of the sites may not be made until 2007," the ministry spokesman said.

Unesa, Spain's Electricity Utilities Association, Iberdrola and Endesa would not comment on the government's announced intentions.